The financial watchdog of Switzerland Financial Market Supervisory Authority (FINMA) has turned down Bitcoin Suisse’s application for a banking license.

According to the Swiss regulator, Bitcoin Suisse AG is not eligible for approval following a string of concerns. FINMA said its prognosis of the situation was unfavorable, following the absence of a number of factors that are relevant under FINMA's licensing laws.

FINMA says the major reason Bitcoin Suisse's banking license was denied was the indication of weaknesses in the company's money laundering defense mechanisms.

The company has decided to withdraw its application for the time being, and FINMA has duly terminated the licensing procedure.

The application would have seen Bitcoin Suisse offer custodial services to its crypto-facing customers in Switzerland. Bitcoin Suisse had applied to FINMA in 2019 for banking and securities dealer licenses.

“These licenses would allow Bitcoin Suisse to further expand its offering with regulated services and products, thereby strengthening its position as a leading provider of crypto financial services,” the press release had stated at the time.

Outside of the licensing fiasco, Bitcoin Suisse's business continues to expand. In a Series A funding round led by Roger Studer of Vontobel fame, a private bank with $ 215 billion in assets under management (AUM), Bitcoin Suisse saw over CHF 45 million ($48.5 million) injected into the company.

This fundraising round saw its market valuation shoot up to CHF 302.5 million ( roughly $327 million) in July 2020.

The company is also reportedly fast-tracking an initial public offering (IPO) process and will be publicly listed in a few years to come.

Bitcoin Suisse recently launched a payments solution that enables crypto owners in Switzerland to pay taxes with digital assets making it the first company in the European nation to do so.

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